The founder of a start-up is accused of fraud after selling schools an AI chatbot.
” Founder of AllHere Education Faces Fraud Charges ” Arrested and accused of misleading investors about the company’s earnings, the founder of an education-focused artificial intelligence start-up Joanna Smith-Griffin, the creator of an artificial intelligence system, was accused of deceiving investors about her revenue and clientele, which she said included some of the biggest school districts in the country, including the one in New York City.
In 2016, AllHere Education was founded by Joanna Smith-Griffin to reduce absenteeism and boost student and parent involvement through artificial intelligence. To illegally raise nearly $10 million in financing, Ms. Smith-Griffin, 33, allegedly overstated AllHere’s revenue and clientele.
Charged with wire fraud, securities fraud, and aggravated identity theft, Ms. Smith-Griffin was taken into custody on Tuesday in her home state of North Carolina. Over 40 years in prison are in her future. Among AllHere’s products was “Ed,” an artificial intelligence chatbot that, according to the company, “creates individual learning plans for each student using student data.
“According to Ms. Smith-Griffin’s 2021 investor presentation, AllHere’s technology was being used by eight public school systems, including those in New York, Atlanta, and Baltimore. In this case, a representative for the New York City Department of Education chose not to comment. According to an Atlanta Public Schools spokesperson, the school is checking all of its contracts to make sure none of them involve AllHere.
It’s unclear if any of Mr. Banks’s stated intentions for A.I. were carried out because he departed from his job in October.
AllHere was initially created by Ms. Smith-Griffin at a start-up incubator in 2016. She pitched an education service that would automatically email parents to check in on their kids and ensure they were attending school. Ms. Smith-Griffin continued by using her company’s exaggerated success to “raise her public profile.” In the profile that goes with it, she stated that the closure of schools during the COVID-19 pandemic had put a strain on her business model and compelled her to alter her approach.
In 2016, Ms. Smith-Griffin had the idea for AllHere at a start-up incubator. She pitched an education service that would automatically email parents to check in on their kids and make sure they were at school. The indictment claims that Ms. Smith-Griffin misled her company’s financial prospects and clientele while formally starting to raise money in a Series A seed round by November 2020.
According to the profile that goes with it, Ms. Smith-Griffin stated that the closure of schools during the COVID-19 outbreak had strained her business model and compelled her to alter her approach. To distribute phony documents to investors, Ms. Smith-Griffin constructed an email address and pretended to be an AllHere financial expert. Afterward, she was fired by the company’s board of directors.
Describe AllHere Education.
AllHere Education, Inc. was established by Smith-Griffin in 2016. The startup gained notoriety for interacting with families and students through an AI chatbot. AllHere signed a multi-million dollar deal with the Los Angeles Unified School District in California in 2023 to create an artificial chatbot called “Ed,” the indictment claims.
Prosecutors describe the alleged fraud scheme’s operation.
According to the prosecution, Smith-Griffin spoke with the board of directors and investors on a financial report inconsistency using the identity of an outside consultant. To update investors and the board of directors on the company’s revenue, number of contracts with school districts, and payments made by an outside consultant, Smith-Griffin used an AllHere Education email account.
Bankruptcy and furloughing
This year, AllHere Education put most of its workers on furlough in June and filed for Chapter 7 bankruptcy in August, which allows for asset disposal.